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Economy

Government orders to merge NSEL to parent firm FTIL

NSEL-Logo

The Central Government has passed an order to merge NSEL (National Spot Exchange Ltd.) with FTIL (Financial Technologies India Ltd)

Public interest

The order has been passed by the Ministry of Corporate Affairs. According to Section 396 of the Companies Act, 1956, the central government can order the merger of two companies if it is essential in public interest. The clause has been rarely used by the government. However, in this case, since the subsidiary is cash-strapped and has no funds to pay its dues, the government has ordered the merger. The merger with the financially viable FTIL will facilitate the recovery of dues for creditors of the NSEL.

Challenge by stakeholders

According to the law, submissions can be made to the Ministry of Corporate Affairs within 60 days of the order. The shareholders and stakeholders of FTIL are expected to file submissions with the Ministry opposing the merger. Through the merger will benefit the victims of the scam perpetrated by NSEL, it will also dilute the assets of FTIL and affect the investments of the shareholders and stakeholders of FTIL.

Japan rolls out Mitsubishi Regional Jet (MRJ), its first commercial jet in 50 years

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After a gap of half a century, Mitsubishi Aircraft has rolled out Japan’s first commercial jet .

Nature of the MRJ

The MRJ has a little less than 100 seats. The jet is valued at $42 million. It marks Japan’s second attempt to enter the commercial aircraft market. The unique aspect of the MRJ is that is consumes one fifth less fuel than an aircraft its size.

Development of the MRJ

The MRJ has been developed by a subsidiary of Mitsubishi Heavy Industries which  counts carmaker Toyota Corp as one of its shareholders. The MRJ will now be subject to a multiple flight before the first delivery of the aircraft in June 2017. This target is 3 years later than Mitsubhishi’s original plan.

Government approves Ahmedabad Metro Rail project phase-1

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The Union Cabinet has given its approval to grant financial assistance to the Ahmedabad Metro Rail Project.

The Cabinet has granted its approval for the Rs. 10,773 cr project to build Phase I of the Ahmedabad Metro Rail project.

Phase I of the metro rail

Phase I of the rail project covers a 35.96 km long route along two corridors, namely, the North-South Corridor covering 15.42 km from APMC to Motera Stadium and East-West Corridor covering 20.54 km from Thaltej Gam to Vastral Gam.

Role of the Central Government

While the total project cost is Rs.10,773 cr, the Central government will contribute Rs. 1,990 cr in the form of equity and subordinate debt.

Implementation of the project

The project will be implemented by the Metro-Link Express for Gandhinagar and Ahmedabad (MEGA) Company Ltd., which will now be converted into a 50:50 jointly owned company of the Central government and state government of of Gujarat.

Legal Framework

The project will be covered under the legal framework of the Metro Railways (Construction of Works) Act, 1978; the Metro Railways (Operation and Maintenance) Act, 2002; and the Railways Act, 1989.

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